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Florida Public Service Commission Gets Earful on Higher Local Phone Rates

Posted on: Wednesday, 29 October 2003, 06:00 CST

Oct. 30--Higher local phone rates were protested by some and proclaimed a necessary part of doing business by others in a public forum on Wednesday.

Consumers, business representatives and legislators expressed their concerns about raising local phone rates to members of the Florida Public Service Commission in West Palm Beach, one of several hearings being held across the state.

Supporters of the legislation say rates charged for local residential phone service and single-line business service are below cost, which deters new phone companies from entering the Florida market. Like the cell phone industry, increased competition will lower prices, supporters say.

Many residents don't realize that, according to the legislation, any increase in local phone rates must be offset by a decrease in-state long-distance rates, said BellSouth Corp. spokeswoman Marta Casas-Celaya in an interview.

Several chamber of commerce representatives and some small-business owners spoke at the hearing in support of the legislation.

Mike Jones, president of the Economic Council of Palm Beach County, told the PSC his group's overriding concern was to promote competition. "We believe in the free market. ... Let the customers decide what they're willing to pay for services."

A chief opponent of the legislation is the AARP, which represents 2.6 million seniors in Florida. AARP lawyer Michael Twomey said in an interview that the organization is concerned that seniors living on fixed incomes can't afford local telephone cost increases of 35 percent to 90 percent, depending on the provider.

Florida Rep. Irv Slosberg, D-Boca Raton, said senior citizens have had to endure higher health insurance, homeowners insurance, medical insurance and prescription costs. "We have to put our foot down. We've failed people again."

Slosberg said he would introduce legislation to revoke the telephone-service increase, if necessary.

The PSC is weighing approval of the rate changes authorized by the state legislature last spring. Florida's three major local telephone companies, BellSouth Corp., Verizon, and Sprint Florida, were authorized to raise their local telephone rates while reducing the access fees they charge long-distance carriers for calls made in state. Those reductions are supposed to be passed along to consumers.

Last month, the PSC dismissed the original proposals by the three carriers to raise their rates in 2004, and again in 2005, but allowed the companies to refile their plans within 24 hours.

A motion to dismiss had been filed by the Office of Public Counsel and backed by AARP. They charged the three telephone companies had not followed terms of the new law, which calls for changes to be made in "not less than two years and not more than four," by scheduling the rate hikes only 12 months apart.

BellSouth amended its proposal to adjust its rates by smaller amounts in each of three years. The new plan calls for a $1.25 hike in its basic residential rate of $11.04 a month in 2004, and estimated increases of $1 to $1.25 in 2005 and 2006, excluding those who qualify for LifeLine Assistance, a program to subsidize low-income consumers.

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(c) 2003, South Florida Sun-Sentinel. Distributed by Knight Ridder/Tribune Business News.

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